Sensex, Nifty Set To Rebound As Oil Prices Plunge

2/7/2018 9:37 PM ET

Indian shares look set to open higher on Thursday, a day after the Reserve Bank of India (RBI) kept its policy rates unchanged without tightening its policy stance from 'neutral', saying inflation will moderate in the second half of FY19 on the back of base effect. A sharp fall in oil prices may also ease investor concerns surrounding inflation and rising twin deficits.

U.S. West Texas Intermediate (WTI) crude futures ended Wednesday's session down 2.5 percent at a one-month closing low after the U.S. government reported crude stockpiles rose by 1.9 million barrels.

Asian stocks are trading mostly higher this morning, Brent crude futures hovered near six-week lows and gold held on to losses from the previous session while the dollar held steady after U.S. Congress leaders reached a two-year bipartisan budget deal worth around $300 billion.

U.S. stocks fell in the final hour of trading to close lower on Wednesday as sentiment changed from unbridled optimism to skepticism amid the threat of rising inflation and mixed remarks from Federal Reserve officials.

European markets rose sharply to snap a seven-day losing streak on Wednesday, tracking overnight gains on Wall Street and amid reports that Germany's center-right and center-left parties have agreed in principle on a new coalition deal.

Back home, benchmark indexes Sensex and the Nifty gave up initial gains to close lower for the seventh straight session on Wednesday as the Reserve Bank of India ( RBI ) warned of higher government spending feeding into inflation after keeping interest rates unchanged for a third straight meeting, as widely expected.

IT stocks could be in focus today after Cognizant reported its first ever quarterly loss due to a change in U.S. tax policy.